Air Liquide Ukraine

Location:

Ukraine

Project number:

40936

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

B

Target board date:

20 Jul 2010

Status:

Repaying

PSD disclosed:

20 Jun 2011

Project Description

The EBRD is considering providing a loan of up to € 85 million to JSC Air Liquide Yenakievo to construct and operate an on-site air separation plant at Yenakievo Iron and Steel Works in south-eastern Ukraine. The project, when approved by the EBRD’s Board of Directors, is intended to upgrade the quality and reliability of industrial gases supplied to the steelworks and to improve energy efficiency.

Transition Impact

Setting New Standards for Business Conduct
As the first “over-the-fence” project for the supply of industrial gases to the steel industry in Ukraine, the Project will have an important demonstration effect in this major sector of the domestic economy.

Setting New Energy Efficiency and Environmental Standards
Through the replacement of outdated facilities by state-of-the-art air supply units, the Project will foster greater energy efficiency of its client’s operations and promote new environmental standards for the Ukrainian steel industry.

The Client

JSC Air Liquide Yenakievo will be part of the Air Liquide group.

Air Liquide SA is the world leader in gases for industry, health and the environment.

EBRD Finance

The EBRD is considering providing up to €85 million senior long term loan.

Project Cost

Around €100 million.

Environmental Impact

Category B, requiring an Environmental and Social Due Diligence (ESDD), consisting of an environmental analysis of the proposed investment programme and an environmental and social audit of the existing facilities.

The replacement of old air separation units ("ASUs") with state-of-the-art technology has significant environmental benefits. These will range from energy efficiency and therefore carbon emissions reductions to improved safety of the installations and reduced risk of industrial accidents. The new unit is fully compliant with EU IPPC and Seveso Directive requirements and meet EU Best Available Techniques requirements. The ASU will be located on the steelworks site, well away from residential areas, and the operations will have limited impact on any third party.

The due diligence undertaken included a top level review of the operations of the existing steel plants. The operation at the existing host plants is outside the Bank’s area of influence as defined by the Bank’s Environmental and Social Policy.

Overall, the ESDD has confirmed that the project is fully structured to meet Bank requirements and that the Company has a good environmental and social management system and the capacity to fully implement the Bank’s Performance Requirements ("PRs") of Environmental & Social Policy. As part of the Environmental and Social Action Plan, the Company will implement Air Liquide corporate Environmental, Health and Safety standards, which are well developed and fully meet the Banks PRs. The Company will also develop and implement Environmental Management Systems, compliant with such standards as ISO 14001 and OHSASH 18001, at each new facility operated in Ukraine.

In terms of social aspects, the Company has good Human Resource management system and is addressing social and labour issues in line with national requirements as well as corporate standards that meet the Bank’s PRs. The replacement of the existing units with new state of the art unit will reduce labour needed, but the retrenchment will be limited.

As required, the Company undertakes local Environmental Impact Assessment for all new capital construction projects. In addition to the local disclosure, the Bank has worked with the Company to develop a corporate Stakeholder Engagement Plan ("SEP") in line with PR10. As part of the SEP implementation the Company is to publish on its website a Non-Technical Summary ("NTS") summarizing the project and its cumulative impacts and overall environmental and social issues, and measures to mitigate them. The NTS will be provided for each new project undertaken by the Company in Ukraine.

The Bank will monitor the project implementation through annual reporting and monitoring visits.

Technical Cooperation

None.

Company Contact

Corinne Estrade-Bordry, Directeur Relations extérieures

Tel : + 33 (0)1 40 62 51 31

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Project Complaint Mechanism (PCM)

The Project Complaint Mechanism (PCM) is the EBRD's accountability mechanism. It provides an opportunity for an independent review of complaints from individuals and organisations concerning EBRD-financed projects which are alleged to have caused, or are likely to cause, environmental and/or social harm.

Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.